ICICI Prudential MF launches Nifty Private Bank Index Fund

ICICI Prudential Mutual Fund has announced the launch of the ICICI Prudential Nifty Private Bank Index Fund, an open-ended index scheme that aims to mirror the performance of the Nifty Private Bank Total Return Index (TRI).

The New Fund Offer (NFO) will remain open from July 1 to July 14, 2025.

The fund is designed to give investors low-cost, rule-based exposure to India’s private banking sector.

The scheme will passively invest in a basket of India’s top 10 private sector banks, selected from the Nifty 500 based on free-float market capitalisation. The fund will follow the index methodology of the Nifty Private Bank TRI, where the weight of each stock is capped to maintain diversification.
There is no exit load for investors, and the minimum investment required is ₹1,000, with additional investments allowed in multiples of ₹1. Investors can also opt for systematic investment options such as SIPs and STPs. The scheme is also accessible to investors without demat accounts.

According to the fund house, private sector banks play a crucial role in India’s economic progress. These banks have consistently demonstrated strong fundamentals, including high profitability, improved asset quality, and robust capital adequacy.

Over the last two decades, the share of private banks in India’s loan market has grown from 13% in FY2005 to 36% in FY2025, while their share in deposits has increased from 11% to 32% during the same period.

In FY2025, private banks contributed 37% of the Nifty 50’s overall profits, despite accounting for just 28% of its total market capitalisation. The Nifty Private Bank Index has also outperformed the broader market over various time frames, delivering a three-year compound annual growth rate (CAGR) of 19.7% compared to 18.5% for the Nifty 50 TRI. In valuation terms, private banks are currently trading at a price-to-earnings (P/E) ratio of 17.6 and a price-to-book (P/B) ratio of 2.4, which are lower than the Nifty 50’s P/E of 22.3 and P/B of 3.6.

Abhijit Shah, Chief Marketing and Digital Business Officer at ICICI Prudential AMC, said the fund offers a simple and cost-effective way for investors to gain exposure to India’s private banking segment. He added that these banks have shown consistent strength in profitability, asset quality, and capitalisation, making them a potential long-term investment option.

The fund will be jointly managed by Nishit Patel and Ashwini Shinde. It aims to provide transparent and disciplined participation in a sector that has historically supported India’s financial growth and continues to show strong fundamentals.